Largest copper firm expands to energy

Acquisition creates mining-energy giant

Freeport-McMoRan Copper & Gold, whihc claims to be the largest publicly traded copper company, said on Wednesday it plans to acquire Plains Exploration & Production and McMoRan Exploration in a $9 billion cash and stock deal as it looks to increase its footprint in the energy sector.

Freeport will pay $25 cash and 0.6531 shares of its common stock for each Plains share, adding up to $50 per share, or a total deal value of $6.9 billion. Freeport will pay $14.75 cash for each McMoRan share or $2.1 billion after taking into account shares in McMoRan that Freeport and Plains already own. McMoRan shareholders will also get 1.15 units of a royalty trust for each share they hold. That trust will hold a 5% royalty interest in future production from McMoRan exploration properties in ultra-deep water territories. Freeport said the new entity, on a pro forma basis, would generate almost three-quarters of its 2013 operating earnings from mining and the rest from oil and gas.

“This transaction will enable us to add assets with exceptional exploration and development potential to a world-class mining company to create a premier minerals and oil and gas business focused on value creation for shareholders,” James R. Moffett, Freeport’s chairman, said in a statement.